Final National Security Guardrails for Chips for America Incentives Program
nist.gov
nist.gov
For Taiwan's sake, it is a good thing that chip production cannot be created or moved quickly, as I believe it is one reason that Taiwan hasn't been invaded by China yet. In the event of a Chinese invasion, those foundrys would be destroyed well before China could wrest control, and even if they did, it would be unlikely that they could keep them in production, given their incredible complexity, unique parts, and requirement of exceptionally skilled labor.
Anyway, I'll use this moment to recommend some of my goto podcast source for info about trade and national security geopolitics: Center for Strategic & International Studies (CSIS)
https://www.csis.org/podcasts/trade-guys
https://www.csis.org/podcasts/chinapower
Back in 2020, the Brookings Institution laid out the strategy that the Biden administration has subsequently followed, in a report whose title speaks for itself: "Maintaining China's dependence on democracies for advanced computer chips" [0]. The basic argument that the Brookings Institution made was that the US can directly or indirectly control several key bottlenecks in the semiconductor industry. Semiconductors are critical to any modern economy, so by maintaining control over these bottlenecks, the US can maintain a potential chokehold on the Chinese economy.
The Biden administration publicly argues that this is all about national security, but there's no plausible national security interest in preventing Chinese smartphone manufacturers from importing chips fabricated by TSMC. The strategy is to control the flow of high-end chips to Chinese companies, and to prevent China from creating its own high-end chips by controlling access to the machinery necessary to fabricate them. Over time, these controls are going to expand into other areas, like cloud computing. Then, whenever the US likes, it can turn off the spigot, and China will simply not have access to modern semiconductors.
That's the theory. Of course, China has something to say about this as well, and has been working like crazy over the last few years to develop substitutes to US-controlled imported semiconductors. The attempt to drive Huawei out of business with sanctions was the shot across the bow, and China got the message. Huawei's new smartphone with 7nm chips and 5G is an indication that China has made significant progress, but we'll have to see how things develop.
0. https://www.brookings.edu/articles/maintaining-chinas-depend...
A good example is Huawei making its own modem something Apple is unable to do.
Take a look at all the other areas where China worked with the Western vendors and then replaced them after taking their IP.
Also, the CHIPS act targets high end chips because advanced chips are critical to developing AI. AI superiority has major economic implications which can roll into security implications, but more directly, AI will power modern military weapon systems, want it or not, those are coming.
When it comes to semiconductors, it's the exact opposite. The US controls the supply chain, and is weaponizing that control to a far greater extent than China has ever done with any sector.
If US policy were simply about reducing the US' own dependencies, the US would not be trying to drive Chinese semiconductor companies out of business with sanctions. US policy is about crippling the Chinese semiconductor industry, in order to be able to apply pressure on China on a whole range of other political and strategic issues.
Here's how the Brookings Institution study ends:
> If SME export controls successfully reduce China's chip fab capacity, the United States, Taiwan, and South Korea — the only remaining economies with significant near-state-of-the-art chip fab capacity — could coordinate on further, targeted end-use and end-user controls to advance the cause of human rights and global stability.
The plan is to make China entirely dependent on the US and its allies, and then to turn the screws to force China to make concessions on other issues. This is exactly the sort of supply-chain weaponization the US says China might theoretically engage in in the future.
Yes, the U.S. has turned sour on China, and for good reasons. China has turned away from liberalization, cementing one ruler for life while "anti-corruption" campaigns removed his political rivals. We tired of how our economy was playing by rules that the Chinese were not including massive protectionist subsidies, inappropriate currency peg that prevent American companies from competing, one-sided requirements to give IP or trade.secrets to China in order to enter their market, (which affects our US economy particularly as it is highly dependent IP dependent), increasing aggressive Chinese nationlism and anti-American rhetoric in the Party, massive IP theft from hacking, or straight up counterfeiting, with little done to curb it, the high rate of forced labor, state sponsored industrial espionage at scale, pervasive and horrific.human rights abuses at home, the fall of Hong Kong!!!, and the rising threats to Taiwan.
And lest you think economic decoupling is at the behest of U.S. war policy, its because corporations have independently decided that China is too risky, because of all the things mentioned above, and because covid taught the value of diversification of risks.
Need I really go on?
You consistently defend China and implicate US as being the aggressor, but I think its mostly the opposite: The U.S. had ignored Chinese aggressions for too long because the good were cheap and because there was the dream that integration would bring mutual liberalization.
Almost none of this is true, or at least is extremely exaggerated. Your basic picture of China is completely wrong.
First off, American companies have done extremely well in China over the last few decades. Given your litany of supposed problems, you'd never know that American companies dominate large chunks of the Chinese market and have made massive profits in China.
The IP issues you raise are massively overblown. Yes, there were regulations in the past that required some level of IP sharing to enter some parts of the Chinese economy. These requirements were not that onerous, and many foreign companies made the rational and correct calculation that transferring a small amount of IP was worth it in order to access the large Chinese labor pool and market. Companies like Volkswagen did extremely well despite IP transfer, because that transfer was minor, and their investments in China were very lucrative. From the Chinese point of view, putting some conditions on foreign investment made sense. China was an undeveloped, mostly agricultural country that was just beginning to let in foreign corporate giants. China gave them access to a giant pool of cheap labor in exchange for some IP transfer. I don't see how that's morally wrong.
On counterfeiting, this is something that happens in every underdeveloped economy. It's extremely difficult to prevent every little corner shop from making counterfeit goods, especially when the country has much more pressing problems to deal with (like much of the population not having access to running water or electricity). However, as China has developed, it has cracked down on counterfeit goods, and they're much less common than they used to be. I don't think China is worse in this regard than other countries at a similar level of economic development.
About the supposed high rate of forced labor, I don't know where you're getting your statistics. China is not even a low-wage country any more (salaries are higher than in Mexico, for example). However, there have been plenty of evidence-free accusations of forced labor in Western media, ironically discussing Chinese programs designed to provide higher-paying jobs to the rural poor.
> The U.S. had ignored Chinese aggressions for too long because the good were cheap and because there was the dream that integration would bring mutual liberalization.
These supposed "Chinese aggressions" you're raising were extremely lucrative for the United States, and were responsible for a large fraction of American economic growth over the last few decades. The reason the US is freaking out right now is because Americans have realized that China is becoming a peer power. The very existence of a peer threatens the entire American political self-image. Nothing China could do, short of ceasing to exist or becoming poor again, would appease the US.
You hold really extreme views on China, which do not correspond at all to reality. I think you should go visit, and ask yourself if what you see is the horror scenario you had pictured.
Yes. In isolation, that would be both a reasonable and commendably planned exchange. However, the context is important.
Trading partners need to grow in the same direction. They should over time become greater allies, must profess similar beliefs in human freedom, democratic institutions, responsibility for global welfare, should not shield bad State-actors like North Korea, do not increasingly centralize power behind one man, and do not increasing be antagonistic to freedom of expression, or so thoroughy crush free speech and information at home.
For example, what it appears like is that the West's openess of the internet has put our citizens as targets for disnformation warfare, while China's tight control has their populace locked down from each other, and from the U.S., while anti U.S. rhetoric rises in China Party Statements.
So you can pretend in isolation, that the exchange was mutual and done, trading partners are supposed to be more than transactional, they are supposed to build trust.
The context is that these requirements were put in place in an era when China had a large, cheap labor pool to offer, but was sorely lacking in technical know-how. Trading access to that labor pool for IP was a perfectly reasonable thing to do.
As China has developed economically, it has reduced IP transfer requirements. Half of Tesla's production is now on China, but they completely own their own factory and don't have to transfer IP. The IP transfer requirements were a stepping stone on the way from an agricultural economy to a modern industrialized economy.
> Trading partners need to grow in the same direction.
Trading partners don't have to like one another. They just both have to gain from the transaction.
> China's tight control has their populace locked down from each other, and from the U.S.
Ironically, Chinese people generally know a lot more about the United States than Americans know about China. There is censorship in China, but a good chunk of the population speaks English at some basic level (whereas very few Americans speak Mandarin), American movies and TV shows are popular, and people can get around the censorship with a little bit of effort (installing a VPN).
> while anti U.S. rhetoric rises in China Party Statements.
Having experienced both Chinese coverage of the US and American coverage of China, I can tell you that American coverage of China is far more negative than vice versa. The level of hatred and vitriol in the US towards China is reaching astronomical levels. CCP rhetoric about the US is tame in comparison to what you'd hear on the floor of the US Congress - Chinese government statements come across as conciliatory, in comparison. In the US, even people who know nothing about China have strong opinions and profess hatred or fear of the country. It's been very alarming to see.
>That CSIS would promote the expansion of the military and surveillance state is predictable, since that’s who pays its bills; what the Times revealed was a specific, rather direct example of this, using heretofore secret documents.
https://fair.org/home/nyt-exposes-a-favorite-source-as-war-i...
I'll list just the donors 250k or more
M.J. Chung
Dalio Philanthropies
John and Julie Hamre
Jim McNerney
Khosravi Family Foundation
The Margot and Thomas Pritzker Family Foundation
Andrew and Barbara Taylor
Byron D. Trott
Government of the United States
Government of Japan
Government of the Republic of Korea
Government of the United Arab Emirates
Taiwan
Amazon Inc.
Aramco
Bank of America Corporation
Chevron Corporation
Deloitte Touche Tohmatsu LLC
Exxon Mobil Corporation
FedEx
General Atomics
GSK plc
HII
Leonardo S.p.A
Lockheed Martin Corporation
Microsoft
Northrop Grumman
Pratt Industries, Inc.
SAIC (Science Applications International Corporation)
Bill & Melinda Gates Foundation
Korea Foundation
Oceans 5
Open Society Foundations
Rural India Supporting Trust
Sarah Scaife Foundation
SED Fund
Smith Richardson Foundation
Stanford University
The Starr Foundation
Stavros Niarchos Foundation
Wadhwani Foundation
US and Allied Partners: https://www.csis.org/about/financial-information/donors/us-a...
Corporate: https://www.csis.org/about/financial-information/donors/corp...
Foundations: https://www.csis.org/about/financial-information/donors/foun...
Being NatSec focused, they tend to think more more more, but it is not clear to me that CSIS is appropriately thought of as propaganda.
Now that their pants are on fire, they are trying to bring back all that they lost. How do we know the unelected bureaucrats that caused this problem are not still at the helm? Why don't they ever feel any of the pain of their actions?
> The most recent Countries of Particular Concern designations were made by the Secretary of State on November 30, 2022: Burma, People’s Republic of China, Cuba, Eritrea, Iran, the Democratic People’s Republic of Korea, Nicaragua, Pakistan, Russia, Saudi Arabia, Tajikistan, and Turkmenistan.
https://www.state.gov/countries-of-particular-concern-specia...
I wish I understood why they pretend this is something other than a cold war.
The list is used as a list of reasonable-to-exclude countries from the CHIPS act.
The same list is used _all over the place_, including things like NASA mission collaboration, government funding for conference travel, background checks for visiting gov offices, etc.
https://www.uscirf.gov/news-room/releases-statements/uscirf-....
https://www.state.gov/reports/2022-report-on-international-r....
Don't you just hate how devs makes things way more complicated than they need to be? Granted I'm not a dev myself, but how hard can it be? I'm very smart and I could rewrite this all to be way clearer.
(Maybe you were just asking a sincere question, in which case sorry for my sarcasm here. It's just, the sentiment reeks a bit of typical HN hubris to me.)
Well, in a case of direct war with China or Russia, it will not be microchips you would be worried about.
USA is amazingly self sufficient nation, probably more than any other nation in the world, but... it lost far more critical items any nation must manufacture other than iphones.
You will not die from not receiving a new iphone, but you will die from lack of antibiotics if you catch gangrene, or something as dumb as typhus (my uncle died from it in his twenties)
USA can make a superweapons, but can't seem plainly make enough ammo for them. So much bad it is, a single German company produces more shells than entire American industry. All these big tanks, ships, and bombers will become useless in just 2-3 month of intense conflict.
After a big war, you will need huge amounts of basic materials to rebuild fast, before the enemy does the same. I have just to say: China has passed 1 gigaton of steel output per year
Can you cite this statistic about ammo/shell production? I haven't been able to find any reliable numbers on annual production by country or company. The sources I have found all seem unreliable and instead list the authors favorite ammunition companies. Among about a dozen of these low-quality articles, I've not seen any references to your magical German company as the highest volume.
The US military heavily relies on quick, precision fires in a way few militaries do as a matter of doctrine. Quantity matters much less than quality in these cases. Though the US has absolute numerical superiority for a lot of land war systems (e.g. the US has ~8000 Abrams tanks), half of which are in storage because they don’t have a use for that many. Ammunition for these systems is similarly in cold storage.
We (the US) don't make a high volume of weapons ammunition such as artillery shells because we have a huge stockpile that is carefully managed and rotated. We make new shells, they go into storage, and the older shells come out and are used for training. Production went from about 14k shells per month a few months ago to over 30k per month today, and will flex up production to over 100k shells per month in the next year. That is just a relatively mundane engagement of our production capacity, if military planners believed they needed 2 million shells per month we would be able to reach that level of production do that in less than a year.